How Rising Oil Prices Will Impact the Trucking Industry

This spring is shaping up to be the most expensive driving season in more than three years for commuters and individuals driving passenger cars. Currently, more than 16 percent of gas stations across the country are charging more than $3 a gallon, and the average price for a gallon of gas is $2.81. This increase is largely due to the rising price of oil — crude oil is currently selling for $68.64 a barrel, higher than it has been since 2014. While this might be a bad thing for casual drivers, what does it mean for the trucking industry?

The Cost of Trucking

An average big rig can easily use upwards of 20,000 gallons of diesel fuel a year. The current average cost for a gallon of diesel fuel, at the time of this writing, is $3.16 a gallon, which works out to just over $63,000 a year in fuel alone.

This cost will continue to creep up as the price of fuel creeps up — and as diesel fuel surcharges climb to match. With more than 80 percent of cities in the United States receiving all their goods exclusively by truck, the trucking industry won’t fade away anytime soon — but it will get more expensive for trucking companies to make the same runs.

The Trickle-Down Effect

It isn't just the cost of trucking that is going to climb — it's the cost of everything. One great example was during 2010, when gas prices were at some of the highest in history. Between January 2010 and January 2011, the price for a barrel of crude climbed 14 percent, from $78.33 to $89.17. As a result, the prices of the products being shipped by those trucks climbed as well.

Gas and diesel prices peaked in 2014 and have been on a downward trend ever since, but now that they're climbing again, we may start seeing the price of these products start to increase once again.

Fuel Economy and Rolling Resistance

With gas prices soaring, it is again becoming more cost-effective to invest in fuel-efficient trucks and modifications for existing trucks to help them increase their fuel efficiency. One thing many owners and operators overlook that can play a key role in this efficiency is rolling resistance.

In a nutshell, rolling resistance is the drag your tires create on the road. This resistance doesn't want to let your truck, car or even bicycle move forward, so it takes a certain amount of power to overcome this resistance.

Therefore, car and truck tires are made with flexible rubber — when your tire hits the road, it flattens. The rubber allows it to grip the road and continue moving you forward. Once the surface leaves the road, the tire returns to its round shape. Old or improperly inflated tires work against this flexing action, meaning it takes more energy — and subsequently more fuel — to move your tires forward.

Fleets can save 1 to 3 percent on fuel by keeping their tires properly inflated and balanced. Regular inspections and maintenance can help to improve your fuel economy by reducing the amount of force that it takes to keep your truck moving.

In addition to this, reducing speed, improving cabin aerodynamics and reducing truckload can all help improve fuel economy and reduce overall fuel costs.

The Future of the Trucking Industry

The trucking industry is already having trouble keeping up with its driver needs. Older drivers are working toward retirement, and the industry isn’t enticing younger workers. Some companies are experiencing a turnover rate of up to 90 percent, meaning they're replacing nearly their entire fleet of drivers every year. Higher pay and better benefits could help attract new drivers to enter the workforce, but higher pay for drivers means higher costs overall — something many companies are trying to avoid in the face of rising fuel costs.

The shippers — who may find themselves paying close to market price to transport their goods — will absorb these higher costs first, then the consumer will have to pay more for their goods when they reach the stores.

The future of the trucking industry will depend on how well individual companies and drivers can adapt to this changing field. There will always be a need for truckers and the rigs they drive, but it remains to be seen whether there will be enough truckers to meet the needs of the industry as veterans reach retirement age.

The cost of fuel is just one part of the puzzle. Companies will need to balance the rising fuel costs with other expenses, including changes they’ll need to make to bring new blood into the field and keep prices competitive.

Relevant Product

Less Than Truckload (LTL) freight shipments are those not large enough to require their own truck and which are instead combined with other LTL shipments. The LTL market is $30 billion annually, or ap...

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